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Older workers crowding ranks, companies get top-heavy

Jan 15,2020
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The number of middle-aged workers stuck in low-ranking positions is growing. Due to sluggish sales and an inelastic labor market, firms are recruiting fewer employees, and older employees are bunched up on the lower rungs.

Having worked in a major company for 16 years, a man surnamed Kim, 44, is still the youngest in his department. His team leader is 51 years old, and out of 13 members, there are three more 51-year-olds in the team. As the youngest in the team, Kim makes reservations at restaurants and arranges events, not to mention going to the meetings and education sessions that the seniors do not wish to attend. Simply put, Kim is ranked 96th among 100 employees in the company’s headquarter.

“The human resources team said the average age of the employees in the firm is 46,” Kim said. “It is good that I do not have to pay for the drinks, but I never knew that I would remain the youngest in the team for 16 years.”

In another major company, 209 out of 897 employees are general managers. This means that 23 percent of the entire staff, aside from the executives, are team leaders. On the other hand, there are only 132 assistant managers, which is 14.6 percent, and 46 employees in the lowest position.

Inverted triangle organizations, more executives than regular employees, are becoming the norm. Lotte Department Store hired around 100 new employees in the late 2000s. Only 40 new employees were recruited last year.

Large corporate headquarters and holding companies tend to have a more inverted triangle structure. In K Group Holdings, the “head” positions (department directors and deputy general managers) are 36.6 percent of all employees. Assistant and general managers are just 35.9 percent.

Statistics confirm that workers are aging. Based on 2017 data from Statistics Korea, workers in their 20s and 30s hold 7.8 million jobs, whereas workers in their 40s and 50s hold 9.1 million jobs. As such, the increasing number of middle-aged workers remaining the youngest in the team is inevitable with the current population composition.

Such an age mix also affects the working environment. “In the past, a department director would make important decisions bearing great responsibility, but I have never had such an opportunity as a department director. If it were to be in the early 2000s, I should be in a second or a third year as a team leader by now. But I am still doing petty work as a junior worker,” said a department director at CJ Group.

An executive at Hanwha Group said, “Department directors today seem to have less discretionary power than the general managers 20 years ago.”

The changing atmosphere makes life difficult for middle-aged people. Petty chores no longer go to rookie workers like in the past, because it can be a legitimate reason for the rookies to quit. Instead, the petty work goes to the middle-aged senior employees who are more used to the hierarchical culture. Some even say, “Department managers need to walk on eggshells around assistant managers.”

More companies are creating educational programs to understand generational differences and to adapt to the horizontal organizational structure. Posco came up with a YouTube video for senior employees to help them understand younger employees. Lotte Shopping executives are receiving “counter-mentoring” from young employees to keep up with current issues and trends. LG Chem came up with a program where the new employees teach the executives during an executive workshop.

Companies are becoming more horizontal.

Instead of the existing assistant manager, general manager, deputy general manager and department director system, SK Group and Shinsegae Group now simply refer to these positions as “manager” or “pro.”

“The vitality will eventually fall in the workplace as the average age grows,” said Lee Myoung-jin, a sociology professor at Korea University. “In addition to revitalizing the organization through various programs, the seniority-based mindset needs to disappear in the company.”

BY LEE SOO-KI, LEE SO-AH AND KANG KI-HUN [kim.yeonah@joongang.co.kr]